Tag Archives: health insurance

Over the weekend, the Centers for Medicare & Medicaid Services (CMS) issued a statement saying it was halting billions of dollars of payments to insurers under the Affordable Care Act’s risk adjustment program due to conflicting federal court decisions on the program. This move will likely disrupt the insurance market in the Exchanges and could lead to more premium increases next year.

The purpose of the risk adjustment program, a permanent program, is to reduce the incentive for health insurers to select and cover only healthy individuals in the Exchanges. It shifts money from plans with healthier members to those with larger numbers of sicker members to help mitigate high costs of coverage for less healthy individuals.

America’s Health Insurance Plans (AHIP), the association for insurance carriers, expressed concern and stated, “the decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own. It will create more market uncertainty and increase premiums for many health plans—putting a heavier burden on small businesses and consumers, and reducing coverage options. And costs for taxpayers will rise as the federal government spends more on premium subsidies.”

The CMS has asked for additional guidance from the district judge overseeing the case relating to this program, prior to unfreezing the funds.

It’s a favorite phrase of my boss – and WIPP’s Chief Advocate – Ann Sullivan. The idea is nothing new: a simple solution is usually the best. That is why, for years, women business owners used the simplest possible idea for providing health benefits – you (employee) go out and get your own insurance and I (employer) will reimburse you. Simple, right?

They are called Healthcare Reimbursement Arrangements, or HRAs, and bringing them back (for the second time) is one of WIPP’s top healthcare priorities. We are making great progress. The House Ways and Means Committee approved legislation that would allow HRAs to be used for firms with fewer than 50 employees. The House as a whole is expected to vote on the bill next week.

The bill would allow employers to reimburse employees for qualified medical expenses like premiums and out-of-pocket costs. Importantly, employers must offer it to all eligible employees and cannot offer a separate group plan. The reimbursement is capped at around $5,000 for an individual and $10,000 for families and does not count as employee income (meaning no taxes!).

Again, the idea is simple. Employers select an amount to reimburse employees, instead of locking in an insurance plan that may not fit their employees or their budget. But why did we lose HRAs in the first place? That is not so simple.

The Affordable Care Act eliminated caps on health insurance plans—an undoubtedly good thing for when disaster or disease strikes. But, in the opinion of the IRS, these HRAs, by definition, had a cap (however much the employer contributed). So they were outlawed in 2013 or 2014.

2013 or 2014 is a strange way to describe when the IRS banned a certain healthcare plan. But that is what it was – the IRS notices on the issue were so confusing they had to issue additional regulations three times. Policy wonks, insurers, and healthcare consultants were unsure – let alone business owners – about whether they were allowed. And making a mistake on this carries severe penalties; offering a non-conforming plan can trigger a penalty of $100 per day per employee –more than $350,000 a year for a company with 10 employees.

Because of this confusion, WIPP stepped in asking Secretary Burwell to intervene on behalf of women business owners. She did and HRAs were allowed through June 2015. Legislation is needed to bring them back permanently and WIPP is optimistic Democrats and Republicans can work together, as they already have, to get this done. After all, ten million women business owners and their nearly nine million employees are pretty active voters.

It’s pretty simple.

More on how WIPP is working with Congress and the Administration to bring competitively-priced and accessible health options to women business owners is in our blog, Making the Affordable Care Act Work.

It’s time to get covered! Millions of Americans count on HealthCare.gov for quality and affordable health coverage. If you or someone you care about needs health insurance, you should know that Open Enrollment for 2016 coverage runs from November 1, 2015 through January 31, 2016.

Learn about options available in your area by visiting HealthCare.gov or call 1-800-318-2596.

Key Dates and Deadlines

November 1, 2015: Open Enrollment for 2016 Marketplace coverage begins.

December 15, 2015: Deadline to enroll for coverage starting January 1, 2016.

January 15, 2016: Deadline to enroll for coverage starting February 1, 2016.

January 31, 2016: Last day of Open Enrollment for 2016 Marketplace coverage.